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Cullum eyes windfall in Candover deal

UK insurance tycoon Peter Cullum is in talks to sell a 25% stake in Towergate to Candover, in a deal that will value his company at more than Â£3bn (â‚¬4bn).

The divestment is expected to raise Â£850m, a portion of which will be distributed among Cullumâ€™s top team ahead of changes to the UK capital-gains-tax regime in April. The remainder will be reinvested in the business.

Cullum, one of UKâ€™s most successful entrepreneurs, currently controls a 70% stake in Towergate. Sources say he will still own more than half of the group even after the deal. It is understood that Cullum and Candover plan to list the company on the London stock market within three years.

Since its inception less than 10 years ago, Towergate has grown into UKâ€™s biggest privately owned insurer with turnover of Â£243m and earnings of Â£94.4m, as per its last published accounts.Candover has already been associated with Cullumâ€™s firm, having provided half of the Â£15m in start-up capital ten years ago.

Meanwhile, private equity firm Gresham has decided to sell Giles Insurance Brokers to Charterhouse, the UK buyout fund, for Â£185m - after having backed a Â£45m buyout in 2006.